{"id":381630,"date":"2026-07-01T03:10:15","date_gmt":"2026-07-01T03:10:15","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-ca\/381630\/"},"modified":"2026-07-01T03:10:15","modified_gmt":"2026-07-01T03:10:15","slug":"sacramento-democrats-are-raising-taxes-on-private-health-insurance","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-ca\/381630\/","title":{"rendered":"Sacramento Democrats are raising taxes on private health insurance"},"content":{"rendered":"

California Gov. Gavin Newsom<\/a> has never seen a pocket he didn\u2019t want to pick.<\/p>\n

And on his way out the door, Democrats want to cover his profligate spending habits via your health insurance.<\/p>\n

The vehicle is the Managed Care Organization tax (the MCO tax), a levy the state collects from health insurance plans.<\/p>\n

New federal rules forced California to restructure it, and Sacramento\u2019s solution, Senate Bill 125, lands the new burden squarely on people who buy private insurance<\/a>.<\/p>\n

\"Associated<\/p>\n

Associated Press<\/p>\n

As the state\u2019s legislative analyst and others have noted, California had been charging Medi-Cal plans at a higher rate than private plans.<\/p>\n

This amounted to a quasi-shakedown of the federal government.<\/p>\n

SB 125 lowers the tax on Medi-Cal plans<\/a> while raising it on private plans to the same level.<\/p>\n

The result, if Newsom signs it,\u00a0will shift more of the cost burden<\/a>\u00a0onto people who buy private insurance, while likely bringing in less revenue overall.<\/p>\n

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The plan costs working families more and the state less. That is not tax reform. That is a bailout for a governor who has spent nearly a decade growing government to a point where more Californians are leaving than coming in because the state is so unaffordable and unlivable. We keep paying five-star prices to get half-star services.<\/p>\n

State Assemblyman Carl DeMaio, a Republican from San Diego,\u00a0says it will cost the typical family $400<\/a>\u00a0in higher premiums this year alone.<\/p>\n

\"State<\/p>\n

State Assemblyman Carl DeMaio, a Republican from San Diego, says it will cost the typical family $400 in higher premiums this year alone. MediaNews Group via Getty Images<\/p>\n

As political strategist\u00a0Jon Fleischman<\/a>\u00a0observes,\u00a0\u201cat\u00a0a time when Californians rank affordability as their major concern, the state government\u2019s answer was not to cut costs or red tape or deliver real tax relief. Instead, the Democrats are advancing new taxes while continuing government growth that already grew dramatically under Newsom\u2019s watch.\u201d<\/p>\n

The structure is somehow even worse than the sticker price. As my friend Katy Grimes\u00a0notes at the California Globe,\u00a0\u201ceven\u00a0if a company lays off a worker or moves that employee out of state, the health plan can still be on the hook for the tax. Call it a \u2018ghost tax.\u2019 Insurers have every incentive to pass these costs along broadly, spreading the pain across their entire book of business rather than just their California enrollees.\u201d<\/p>\n

In other words, the damage does not stop at the state line, or at the people the tax nominally targets.<\/p>\n

Naturally, Gavin Newsom is trying to put lipstick on this pig and dress it up as a rescue mission. He blames Republicans for driving up healthcare costs by letting pandemic-era premium subsidies expire.<\/p>\n

But the math doesn\u2019t add up.<\/p>\n

The\u00a0premium hike Demcorats are proposing<\/a>\u00a0could cost families more than the subsidy changes the governor is decrying. It\u00a0is a\u00a0weird argument, but classic Gavin logic: To protect people from premium increases, Democrats want to impose a larger one.<\/p>\n

This is the part Sacramento would rather you not notice. One version of the measure would\u00a0extend the tax on medical providers to<\/a>\u00a0generate roughly $2 billion a year starting next year. That money will come from premiums, from employers, and ultimately from families already overextended by the cost of living in the Golden State.<\/p>\n

The irony is that Newsom knows perfectly well how to oppose a tax when it suits his personal agenda. He spent recent weeks\u00a0fighting a ballot measure<\/a>\u00a0to tax California\u2019s billionaires, even rejecting a compromise to soften it, all while rolling out a\u00a0national billionaire tax<\/a>\u00a0of his own as part of his presidential ambitions and to get to the left of other possible contenders in 2028.<\/p>\n

To protect himself, Newsom wants, effectively, to trap the wealthiest 200 people in the state (so they can\u2019t vote with their feet). He just cannot find the same fortitude when the people footing the bill are middle-class families paying insurance premiums.<\/p>\n

The MCO tax is not a response to a crisis Newsom inherited. It is a response to a crisis Democrats built, one budget at a time, and their fix is to hand the bill to the people least able to afford it.<\/p>\n

Californians need a government that lives within its means. Until Democrats learn that lesson, every \u201csolution\u201d coming out of the Capitol will look a lot like this one: higher costs for the many to cover the overspending of the few, sold with a straight face as compassion.<\/p>\n

Roxanne Hoge is the chairperson of the Los Angeles Republican Party.<\/p>\n